Unit IX Part 2
Condensed Notes
1920-45
Domestic
The Stock Market Crash
• Black Tuesday: October 29, 1929
Causes of the Depression
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The state of agriculture
The Tariff
Abuse of Big Business
Buying stock on margin
Over production
• The stock market crash was just the last straw
Hoover: A Progressive Republican
• Believed the government should help…
• But help should be INDIRECT
• Did not want Americans to lose their selfrespect by giving out welfare directly from the
Government
• Hoped for voluntary cooperation…
Trickle Down Economics
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Public Works Programs
The RFC (Reconstruction Finance Corporation)
The Agricultural Marketing Act
The Norris-LaGuardia Act
Work Relief
• The Government would pay workers to build
roads, schools, airports, buildings that it did
not need.
• But Americans would earn their income and
the government got something for the $
The RFC
• Government $ went to banks in hopes that
they would continue lending (they didn’t)
• Government $ to businesses in hopes that
they would keep people on the job (they
didn’t)
• Government $ to states so the states could
give out direct relief where needed
Hoover vetoed the McNary-Haugen
Act
• Thought it was too much government
involvement
• Instead: the Agricultural Marketing Act
• Created a Federal Farm Board
• Given $500 million so farm organizations
could buy up farm surplus and then when
prices went up, slowly sell the surplus in U.S.
• Didn’t work
The Norris-LaGuardia Act
• Guaranteed the right to collective bargaining
• Outlawed Yellow Dog Contracts
• 1932 was the worst year of the depression
• Hoovervilles
The Hawley-Smoot Tariff
• When Hoover refused to sign the McNaryHaugen Bill, he lost support of the
progressives in his party
• He wanted the nomination for 1932 so he
needed the support of conservatives
• He was advised by economists not to raise the
tariff
The Hawley-Smoot Tariff
• Caused a severe trade dislocation and brought
the depression to Europe
• The U.S> rate of trade fell faster than the
international rate
• Within 1 year 25 foreign countries passed laws
making it illegal to buy American products!
1932
• Hoover vetoed the Norris Bill: the
government should go into the Tennessee
Valley and build dams and produce fertilizer
and electricity
• Also vetoed the Garner-Wagner Bill: more
work relief
The Bonus Army
• 17,000 WWI vets and their families marched
on the White House demanding an early
payment of bonuses.
• They camped out there
• General MacArthur sent soldiers, tear gas,
tank batallions to clear the vets out!
A real fear of revolution
• The wealthy moved to the Caribbean to wait it
out
• Lloyds of London offering riot insurance
The Farm Security Administration
• Dorthea Lang and Arthur Rothstein and others
to go into rural America and chronicle the
suffering with pictures
• Entertainment: Keep it light
• Marx Brothers at the movies
• Radio: Lone Ranger, Superman
The Books
• Grapes of Wrath…Steinbeck
• Tobacco Road…Caldwell
• Gone with the Wind…Margaret Mitchell
The Dust Bowl
• Migrant farmers to California looking for work
were called OKIES
• Blacks and other minorities were worse off
than whites
• Divorce rates fell. Men just left. Working
women were seen as unpatriotic
The election of 1932
• Republicans: Hoover
• Democrats: FDR
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432
• Relief, Reform, Recovery
• Happy Days are Here Again
• The Brain Trust: advisors, professors from
Columbia University
• Fire side chats
FDR
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Eleanor
Polio
DID believe in direct aid from the Government
THE NEW DEAL
Kept throwing $ at everything hoping that
spending would stimulate the economy
• Pump Priming
The Banking Crisis
• Between the election and inauguration banks
started closing left and right
• Banks were never nationalized
• Emergency Banking Act closed all banks,
Treasury inspections, Government $ to reopen
• Glass-Steagall Act…FDIC and Banks could not
longer finance corporations or sell securities
• Hoarding gold illegal
Amendment 20 Lame Duck
• Eliminated the December session of Congress
after a November election
• Moved the new congress and President
inauguration to January (before it was March)
The Stock Market
• The SEC (Securities and Exchange
Commission)
• Joe Kennedy
• A watchdog on the stock market
• The Federal (Truth in) Securities Act:
• Companies selling securities had to give
clients complete and reliable information
The Economy Act
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To offset the costs of the New Deal
Cut $400,000 in payments to veterans
Cut wages of federal government employees
Did not help much
• Lowered the gold content in the dollar
• Europeans went off the gold standard
completely
The Tariff
• 1934 The Reciprocal Trade Agreements Act
• We lowered our tariff for a country if they
lowered their tariff for our goods
• No more tariffs to learn!
Amendment 21
• Repeal of Prohibition
• After the Progressive amendments (16-19) the
others are called Loose Ends Amendments
Farmers
• Farmers were paid to take their land out of
production with…the AAA
• Problems: roots plowed up during Dust Bowl
and 10 tons of top soil blew into the Ocean!
• Sharecroppers were thrown off the land
• AAA was declared unconstitutional
• So New AAA $ had to be shared with
sharecroppers and something had to be
planted
Farmers
• Fraser-Lemke Farm Bankruptcy Act: no farm
foreclosures for 5 years of last mortgage
payment
• Just put off the inevitable
Industry
• The The NIRA National Industrial Recovery
Act: to help businesses and labor
• Established the NRA (National Recovery
Administration
• Reps from Business and labor to draw up
codes fo fair competition (wages, prices,
everything)
• Sec. 7a to guarantee collective barganing
NIRA
• Ignored antitrust laws so businesses could
recover…they did by 1934 (banks good too)
• BUT violations (155,000 in one year) of section
7a
• Then declared unconstitutional in the Sick
Chicken Case (Schnectner Brothers v the U.S.)
The Wagner Act
• Just for workers
• Created the NLRB (National Labor Relations
Board)
• Could enter a factory and meet with workers
and help them to unionize
• Could also reinstate workers who had been
fired for union activity
Union Activity
• 1935 The CIO was given a charter by the AFL
to organize workers on an industry-wide basis
• John Lewis first head
• /threatened to strike against steel industry
and won concessions
• 1936 the CIO gave a Charter to the UAW…sitdown strikes in the auto industry Success!
Homer Martin first head
Work Relief
• CCC: Young single men for outdoor work for
$30 a month ($25 sent to their families)
• CWA: built roads, schools, hospitals
• PWA: dams, bridges, sewers
• WPA: white color work relief, nurses,
teachers, artists (Clemenson Hall)
• NYA: guaranteed part-time jobs to full-time
high school or college students
More Relief
• FERA: Federal Emergency Relief Adm.
Loans and gifts to states for public relief
FhA: Federal Housing Agency: guaranteed bank
loans for new house or home repairs
Homeowners Loan Corp : to refinance small
mortgages at lower rates
The Tennessee Valley Authority
• TVA an experiment in socialism
• The government went into the Tennessee
Valley (one of the most depressed areas of the
country
• Built 25 great dams, employed 40,000,
produced fertilizer and electricity
The Critics
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From the Right
Hoover wrote A Challenge to Liberty
Others formed American Liberty Leagues
Attacked dictatorial policies of FDR
• Goal: to defend the Constitution and the right
to private property
Critics from the left
• Upton Sinclair almost won as governor of
California. Advocated communal living
• Dr. Townsend give $200 a month to all
retirees over 65 every month as long as they
spend every penny
• Father Coughlin Detroit area: big taxes on
the wealthy
Huey Long
• Louisiana
• The Kingfish
• The Share the Wealth Plan: Just take all
property from the wealthy and divided it
among all Americans
Packing the Court
• FDR needed to get the court in line so they
would not threaten future legislation (the
Social Security Act)
• He suggested to congress that they allow him
to appoint an extra Court justice for every one
over age 60…there were 6!
• The Court backed off
The Social Security Act
• Old age pensions and aid to dependent
children paid for by payroll deductions
• Inspired by European countries
• Problems: $ not sufficient
• Did not help those who did not get paychecks:
farmers, domestic workers, merchant marines
Lection 1936
• The third term was an issue
• The AFL endorsed a candidate for the first
time
• The Black vote went Democratic for the first
time…African Americans were helped by the
New Deal as well
• FDR promised to reduce government
costs…could not deliver
Election 1936
• FDR 523
• Republican: Landon 8
• BUT Conservative (States’ Rights Democrats)
opposed much of the New Deal
FDR
• Tried to cut costs but we went into a recession
so more pump priming
Fair Labor Standards Act
• Abolished child labor
• Other Stuff: Food Stamp Act
• Rural Electrification Administration
• The New Deal did not get us out of the
depression. WWII production did
Was the New Deal
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Conservative or liberal?
A Success or a failure?
Radically different from Hoover’s efforts?
An extension of Progressivism?
• Helped farmers but larger farmers helped more
• Banks and Business were on their feet faster than
workers
Other Trends
• Enrollment in HSs increased and more
graduated
• Disney movies big
• Commercial aviation
• Cellophane, nylon
• Radio: News analysus
• Worlds Fair in NY, Empire State Building
• Amelia Earhart
African Americans
• FDR needed southern democrats’ support
• Fair Employment Practices Committee: to end
discrimination in government and the
workplace (more for the war than civil rights)
• Eleanor was big into civil rights.
• Integrated cafeterias in DC
• Marion Anderson